Tether is a controversial cryptocurrency with tokens issued by Tether Limited. The precursor to Tether, originally named “Realcoin”, was announced in July 2014. It formerly claimed that each token was backed by one United States dollar, but on 14 March 2019 changed the backing to include loans to affiliate companies. The Bitfinex exchange was accused by the New York Attorney General of using Tether’s funds to cover up $850 million in funds missing since mid-2018. Tether is called a stablecoin because it was originally designed to always be worth $1.00, maintaining $1.00 in reserves for each tether issued. Nevertheless, Tether Limited states that owners of tethers have no contractual right, other legal claims, or guarantee that tethers will be redeemed or exchanged for dollars. On 30 April 2019 Tether Limited’s lawyer claimed that each tether was backed by only $0.74 in cash and cash equivalents. Tether Limited and the tether cryptocurrency are controversial because of the company’s failure to provide a promised audit showing adequate reserves backing tether, its alleged role in manipulating the price of bitcoin, the unclear relationship with the Bitfinex exchange, and the company’s apparent lack of a long-term banking relationship.
Original author(s) – Brock Pierce, Reeve Collins and Craig Sellars
Initial release – 6 October 2014
Development status – Active
Website – tether.to